United States of America v. Mustafa Redzic

UNITED STATES OF AMERICA,PLAINTIFF--APPELLEE,v.MUSTAFA REDZIC,DEFENDANT--APPELLANT.

On Remand from the United States Supreme Court.

The opinion of the court was delivered by: Murphy, Circuit Judge.

Submitted: September 30, 2010

Before WOLLMAN, JOHN R. GIBSON, and MURPHY, Circuit Judges.

This case is before the court on remand from the United States Supreme Court which vacated our prior judgment on a grant of certiorari and returned the case for further consideration in light of its decision in Skilling v. United States, 130 S. Ct. 2896 (2010). After Mustafa Redzic was convicted by a jury of mail fraud, wire fraud, bribery, and conspiracy to commit each of the substantive offenses, he was sentenced by the district court*fn1 to concurrent terms of 75 months on each of the substantive counts and 60 months on the conspiracy. Redzic appealed his convictions, arguing that the government had failed to prove he defrauded the state or bribed a state agent and we affirmed. Since the theory of fraud under which Redzic was convicted remains viable under Skilling, we once again affirm his convictions.

I.

Redzic was the owner of Bosna Truck Driving School (Bosna) in St. Louis, Missouri, which trained students to operate commercial vehicles. Students who completed their studies at Bosna and wished to obtain a commercial driver license (CDL) were required to be tested at either a state run facility or a private company trained and licensed by the State of Missouri. The required test consisted of a written exam and a three part driving component which included a pre trip inspection, a skills test, and a road test.

Commercial Drivers Training Academy (CDTA) was a licensed third party tester located in Sikeston, Missouri. Redzic's co-defendant, Troy Parr, oversaw testing at CDTA.*fn2 In order to generate more business and process more CDL applicants, Parr developed a system of "short testing" in which CDTA would omit entire portions of the driving exam or administer it in only a fraction of the time necessary for a proper evaluation. These short tests did not meet the minimum requirements set by the state for CDL testing. Parr regularly gave short tests to Redzic's students and submitted paperwork to the state falsely indicating that the students had successfully met the full requirements for their CDLs. On one occasion Redzic asked Parr to submit paperwork for two students who never even appeared at CDTA, and Parr agreed to do so. A government wiretap also recorded Redzic promising the husband of a potential customer that he could "guarantee" his wife would pass the driving test despite her inability to operate properly a manual transmission.

CDTA charged $150 per student for each test, but Parr testified that Redzic included with his payments to CDTA between $50 to $200 in extra cash on a dozen or more occasions. Parr kept a portion of these overpayments and split the remainder with other CDTA examiners. Redzic also gave Parr two other cash payments of $600 and $2,500. Parr testified that he never requested any of these extra payments although he had been assisting Redzic in his attempt to obtain state certification for Bosna. Such a certification would qualify the school's students for state grant money and could produce another $1 million in business, according to Redzic's estimate. Parr said that he had been willing to consult without payment in exchange for future employment at Redzic's expanded school. He also testified that Redzic had offered him employment to be compensated at some 150 percent of his CDTA salary, a free apartment, bonuses, and free vacations. At Redzic's request Parr rejected a bribe from one of Bosna's competitors and reported the bribery attempt to state authorities. The next day Redzic personally delivered another $2,500 cash payment.

Redzic was charged with and convicted of mail fraud in violation of 18 U.S.C. § 1341, wire fraud in violation of 18 U.S.C. § 1343, bribery in violation of 18 U.S.C. § 666(a)(2), and conspiracy in violation of 18 U.S.C. § 371. Following the close of the government's case, Redzic filed a motion for judgment of acquittal, arguing that the government's evidence was insufficient to sustain any conviction. The district court denied the motion. Redzic chose not to offer any evidence at trial and renewed his motion which was again denied. The jury returned a guilty verdict on all counts.

Redzic subsequently filed a post trial motion for new trial and an amended motion for new trial and for judgment of acquittal. In these post trial motions Redzic raised for the first time a number of issues, including the argument that CDLs are not property for purposes of the federal fraud statutes. The district court denied the motions in May 2008, and Redzic was sentenced the following month. In October 2008 the district court ordered the forfeiture of $25,272.48 in cash, seven trucks, and three trailers pursuant to 28 U.S.C. § 2461.

II.

A.

We first examine Redzic's convictions for mail and wire fraud. The mail fraud statute reads in part as follows:

Whoever, having devised . . . any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations or promises . . . [uses the mails in furtherance of the scheme shall be punished by imprisonment or fine or both].

18 U.S.C. § 1341. The wire fraud statute is, in pertinent part, identical. See 18 U.S.C. § 1343. The Supreme Court in McNally v. United States, 483 U.S. 350 (1987), interpreted the statutory language to apply only to deprivations of property and noted in particular that it did not encompass "the right to have [a state's] affairs conducted honestly." Id. at 352.

In response to McNally, Congress broadened the scope of the mail and wire fraud statutes by enacting 18 U.S.C. ...

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